Build an Emergency Fund in 5 stepsJune 16th, 2010 by nickelnm
I can hear it now. I can’t save. I don’t make enough money. There are always late minute bills, or birthdays, or Christmas. These are excuses not reasons. We all would like to have money in savings. Even having $10.00 in savings will make you feel less stressed about money, (gasp) and the unexpected. So, I am going to teach you how you can build an Emergency Fund, or a Christmas Fund, or Birthday Fund or whatever Fund in 5 steps.
- Pay yourself FIRST!
- This is the absolute most important thing you can do, the credit card companies, the mortgage company, the car loan people they do not care about you. They care about themselves, only! So, right now. Pick a number – $10.00, $15.00, $25.00, $100.00 for a monthly goal. If you can’t decide on a monthly goal, then think to yourself a year from now how much money would you like to have in savings; then divide it by 12. (I highly suggest starting with a smaller number). Personally, my family started with $25.00
- Open a NEW Savings Account!
- Open a brand new savings account at a bank or credit union you don’t normally use. If you pay your bills with an account at Bank of America; then don’t open the savings account at Bank of America.
- Personally, I use ING DIRECT and EMIGRANT DIRECT: I have accounts at each and each has a specific use. (These links may be affiliate links and I may receive compensation if you click on them, but this opinion is 100% honest)
- Turn OFF paper statements
- The two banks listed above are virtual banks; which means you can complete any and all tasks from any internet connection. You will never have to go into a branch; and you can elect to receive your statements electronically through your email
- Set-up automatic savings plan.
- Whichever bank you decide to use should offer an automatic savings plan; set that up. Take advantage. The more automated; the better. This allows you to just forget about what’s happening. I can hear you saying, but what if. Don’t worry about the what ifs; just set a small manageable number for payday every month and let the bank automatically draft it. I promise you won’t even miss it.
- A year or six months from now, or even when/if you get a raise, review, how much you are putting into that savings account. By now, you should have $50 – $500 or more saved. Doesn’t it feel great? It does. So, if you have received a $100 raise; then up your automatic savings by $10 – that’s only 10% of your raise. And you are used to living without that $100 so, your not taking anything away.
What are your saving goals for the next year? How much would you like to see in your savings account? What tricks do you use to grow your own emergency/saving fund?